In Kuntegowda v. Thurubaiah, Criminal Appeal No. 3654 of 2026, decided on 4 August 2026 and reported as 2026 INSC 790, a Bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan restored a conviction under Section 138 of the Negotiable Instruments Act, 1881 that the Karnataka High Court had set aside in revision. The judgment is a compact statement of two rules that decide most cheque dishonour trials: what follows from an admitted signature, and what a revisional court may not do to concurrent findings.
The transaction and the trial
The complainant advanced a hand loan of Rs. 4,50,000 in December 2010 for the purchase of a house site, repayable within a year with interest at 16 per cent per annum. A cheque issued towards repayment was dishonoured in 2013 for insufficiency of funds, and after the statutory notice went unanswered in substance, a complaint under Section 138 of the Negotiable Instruments Act followed.
The trial court convicted the accused. The Sessions Court, in appeal, affirmed the conviction while reducing the fine. In revision, however, the Karnataka High Court set aside both concurrent findings and acquitted the accused, reasoning that the complainant — a man of modest declared income of Rs. 20,000 to 25,000 a month — had not satisfactorily explained the source of the money lent.
What the Supreme Court held
The High Court in revision
Re-weighed the evidence, treated the unexplained source of funds as decisive, and substituted acquittal for two concurrent findings of guilt.
The Supreme Court
Held that the High Court exceeded its revisional jurisdiction. Absent perversity, gross error of law or glaring injustice on the face of the record, concurrent findings could not be disturbed by re-appreciating evidence.
On the substantive law, the Court restated the architecture of a Section 138 prosecution. Once execution of the cheque stands admitted or proved, the statutory presumptions under Sections 118 and 139 arise: the cheque is presumed to have been drawn for consideration and issued in discharge of a legally enforceable debt or liability. The Court added a practical corollary: once the signature on the cheque stands proved, the necessary inference is that the drawer was aware of its contents, unless the contrary is shown.
The burden that then falls on the accused is real but not impossible: the presumption is rebutted on a preponderance of probabilities, by evidence or by probabilising circumstances drawn from the material of the complainant himself. What will not do is what happened here — a plea that a blank cheque had been handed over as security for an unrelated loan of Rs. 40,000 and later misused, raised for the first time in a reply notice sent more than a year after the complaint, and supported by no documentary material at all. The Court treated the defence as an afterthought that did not dent the presumptions.
Why the revisional point matters
The reason this judgment will be cited is less the presumptions, which are settled, than the reminder about the character of revisional jurisdiction. A criminal revision — formerly under Sections 397 and 401 of the Code of Criminal Procedure, now Sections 438 and 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — is supervisory. It exists to correct jurisdictional errors and manifest illegality, not to give a convicted accused a second appeal on facts. Where the trial court and the first appellate court have both weighed the evidence and reached the same conclusion, a revisional court that starts afresh from the record is doing something the statute does not permit.
For a complainant in a cheque dishonour case, the judgment suggests a simple discipline: prove the cheque, prove the dishonour and the notice, and let the presumptions work. For an accused, it is a warning that a defence must be built early and evidenced — a security-cheque plea raised late, without a document to stand on, will be weighed as an afterthought.
The framework at a glance
| Stage | Provision | Effect |
|---|---|---|
| Dishonour and notice | Section 138, NI Act, 1881 | Offence arises on non-payment within 15 days of the statutory notice, complaint within one month thereafter |
| Presumption of consideration | Section 118, NI Act, 1881 | Negotiable instrument presumed drawn for consideration |
| Presumption of debt | Section 139, NI Act, 1881 | Cheque presumed issued in discharge of a legally enforceable debt, rebuttable on preponderance of probabilities |
| Revision | Sections 397/401 CrPC · now Sections 438/442 BNSS | Supervisory only; no re-appreciation of evidence against concurrent findings |
The Negotiable Instruments Act itself is unchanged by the 2023 criminal law reforms; only the procedural shell around it — the provisions governing trial, appeal and revision — now comes from the Bharatiya Nagarik Suraksha Sanhita.
This article is for general information only and is not legal advice. Whether a presumption stands rebutted is always a question decided on the evidence of the particular case.
Frequently Asked Questions
What presumptions arise once the signature on a cheque is admitted?
Under Sections 118 and 139 of the Negotiable Instruments Act, once execution of the cheque is admitted or proved, the court presumes that it was drawn for consideration and issued in discharge of a legally enforceable debt or liability. The burden then shifts to the accused, who must rebut the presumption on a preponderance of probabilities, not by bare denial.
Does it help the accused that the cheque was given blank or as security?
Only if that defence is made probable by material on record. A plea that a blank signed cheque was given as security for a different transaction must be supported by evidence and raised consistently. In this case the plea surfaced for the first time long after the complaint and without documentary support, and was treated as an afterthought.
Can a High Court re-examine the evidence in a cheque bounce revision?
Revisional jurisdiction, formerly under Sections 397 and 401 CrPC and now under Sections 438 and 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023, is supervisory. The High Court may interfere with concurrent findings only for perversity, gross error of law, or glaring injustice on the face of the record. It cannot re-appreciate evidence and substitute its own view.
Is the complainant required to prove the source of the money lent?
The financial capacity of the complainant can be a relevant circumstance if the accused raises it and lays a foundation. But the High Court in this case treated the absence of an explanation of the source of funds as decisive by itself, which the Supreme Court held was an impermissible re-appreciation in revision against concurrent findings.